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West Haven finance director flags $3.6 million general‑fund shortfall and unresolved Board of Education deficits
Summary
Finance Director Michael Gormani told the council the city projects a roughly $3.6M general‑fund deficit; he and the mayor said an unaudited $8M BOE shortfall (special education) plus $4M alliance‑grant accounting issues complicate the outlook and will require state review and a special BOE council meeting.
Finance Director Michael Gormani told the finance committee on March 23 that the city’s February financial snapshot projects a general‑fund shortfall of about $3,600,000 for the fiscal year, driven largely by lower‑than‑expected interest income and several revenue timing issues.
Gormani said tax collections remain on track but interest income — budgeted at approximately $2.4 million — is expected to fall short by roughly $1,000,000. On expenditures, Gormani said vacancy savings and other offsets have reduced pressure but the administration modeled a “worst‑case” scenario that produced the $3.6 million figure.
The committee’s discussion centered on the Board of Education’s accounting, which officials said revealed an unaudited FY25 deficit of about $8,000,000 largely driven by special‑education costs and a separate $4,000,000 variance tied to alliance‑grant accounting. Mayor Dorinda Boer and Gormani said the BOE has used funding streams in a way that requires reconciliation and that the city has asked state offices to help sort the accounting treatment.
"There’s an $8,000,000 deficit due to special education and then another $4,000,000 deficit...which was an overspending of the Alliance Grant," the mayor said. Gormani cautioned that some FY26 projections are a worst‑case build and that trends — hiring, overtime, workers’ compensation and negotiated union settlements — could change the final outcome.
Council members pressed for more detailed line‑item explanations and requested that the superintendent and Board of Education appear before the council at a special meeting to walk through historical accounting and the FY27 budget projection. Gormani noted the city’s fiscal‑year‑24 ending fund balance was about $22,000,000 and that the city can use some of the available fund balance to manage short‑term gaps while the BOE accounting is reconciled.
Why it matters: The finance update outlines short‑term budget pressure that could affect service planning and the FY27 budget process. The BOE’s unaudited deficits, if confirmed, could require adjustments to how state grants and alliance funds are reported and may affect future city and education budgeting.
